Japan's Honda continues to lay off employees at its second joint venture in China

Japan's Honda continues to lay off employees at its second joint venture in China. 6.5 trillion dollars in stock market value evaporated as China's economic crisis deepened. A man from Hubei falls during morning run and sees the wonder of a phoenix dancing in the sky. China's economy is in serious recession with bad news pouring in and the wave of business closures and bankruptcies accelerating. Recently, after Japan's Honda and Nissan announced that they would close factories and production lines in Guangzhou, Wuhan, and Changzhou, further developments emerged. On Monday, September 9th, multiple Japanese media outlets reported that Honda Motor would reduce the number of employees in its joint venture with Dongfeng Motor Group in China, marking the second time Honda has laid off employees in a Chinese joint venture. Dongfeng Honda Motor, one of Honda's joint ventures in China, began soliciting voluntary early retirements at the end of August. The process ended this month, though the number of affected employees has not yet been disclosed. The voluntary resignation plan applies to production workers at three major factories producing fuel vehicles. Honda's new car sales in the Chinese market have declined and another joint venture, Guangxi Honda Automobile, also solicited voluntary resignations in May. Guangxi Honda, a joint venture with the state-owned automaker Guangxi Group, saw about 1,700 people, accounting for 14% of the total workforce, agree to early retirement. Nikkei Asia News reported that Honda originally planned to reduce its workforce in China by about 3,000 employees in the current fiscal year ending in March, which includes voluntary layoffs and natural attrition at Guangxi Honda. However, the layoffs at Dongfeng Honda were not included in this plan, indicating that Honda's layoffs in China may be more extensive. On July 25th, Honda announced that due to sales difficulties, it would cut its annual production capacity by about 290,000 gasoline vehicles in China. This marks the first time Honda has reduced production capacity in China. A Honda spokesperson said that production at joint venture factories with GAC Group and Dongfeng Company would cease in October and November, respectively, with the Dongfeng factory's annual production capacity being 240,000 vehicles. Before the Japanese media reports, Chinese media had already reported that Dongfeng Honda was facing strategic adjustments and planned to implement large-scale layoffs. It was expected that around 2,000 employees would be affected. The layoff compensation plan follows the N plus 2 plus 1 model, and reports even suggest employees were fighting for the layoffs. Dongfeng Honda's official blog announced on September 10th that this personnel optimization was part of a phased adjustment aligned with the company's strategic transformation. In the Chinese market, the demand for new energy vehicles, such as electric cars, has expanded, leading to sluggish sales for Japanese automakers. In August, Honda's new car sales in China fell by 44 percent year-on-year, marking the seventh consecutive month of year-on-year declines. Foreign automakers are facing severe challenges in the Chinese market due to cutthroat competition and policy subsidies from the Chinese Communist Party authorities. According to data from the China Passenger Car Association, the market share of foreign automakers in China fell from 53 percent two years ago to 33 percent in July. $6.5 trillion in stock market value evaporated as China's economic crisis deepened. China's stock market has underperformed global stocks for the fourth consecutive year. The CSI 300 index has recently extended its losses and is approaching its lowest closing price since January 2019. The selloff in Chinese stocks has deepened the crisis of confidence in the world's second-largest economy, putting more pressure on the Chinese Communist Party authorities. The CSI 300 index has fallen by about 7 percent so far this year and is facing an unprecedented fourth annual decline. Coupled with geopolitical tensions ahead of the U.S. election in November, the selling pressure on Chinese stocks is increasing. In recent years, the Chinese market has been caught in the same cycle. Stocks fall back to lows after brief rebounds triggered by optimism. The Chinese Communist Party authorities' piecemeal stimulus measures have failed to solve the crisis of confidence. Deflationary pressures, weak consumption, and a continued slump in real estate have all weakened hopes for a near-term economic recovery. The poor performance of China's stock market contrasts sharply with the global stock market bull run this year, highlighting investors' doubts about China's economic prospects. Currently, emerging market stock funds that avoid China are springing up like mushrooms after rain, indicating that investors are turning to other markets for higher returns. Since reaching their peak in 2021, the market value of China and Hong Kong stocks has evaporated by about $6.5 trillion. Bloomberg pointed out that the risk faced by the Communist Party authorities is that the market downturn may further undermine consumer and corporate confidence, prompting a deflationary cycle in the economy, reducing corporate revenues, and leading to further salary cuts and layoffs. This is also one reason why state-backed funds have spent billions of dollars trying to support stock prices, but with little success. On Monday, September 9, Ron Temple, managing director of Lazard Asset Management, told Bloomberg, This is a surprisingly bad period for the market. The problem is that, China's economic situation is worse than I thought six months ago. The longer the government refuses to take major demand stimulus measures, the longer consumer confidence will be damaged and the harder the problem will be to solve, he said. Asian stocks edged higher on Tuesday, September 10, as Wall Street's optimistic gains provided support, but fears of a Chinese recession continued to weigh on sentiment. Earlier, inflation data released on Monday showed that industrial product price deflation had intensified and domestic demand remained fragile, which has continued to fuel calls for further stimulus measures from the authorities. Bloomberg also pointed out that as the CCP seeks industrial self-sufficiency, the authorities' increasing control over private enterprises and the trade rift with Western countries are additional reasons for the loss of confidence in the Chinese stock market. The CCP's reluctance to pursue economic policies that empower businesses means China will lack both the vitality of emerging markets and the stability of developed markets as it enters an era of low growth, which is bound to put the stock market in trouble. Stephen Leung, executive director of UOB Kaiheon in Hong Kong, said, The investors I know in mainland China and Hong Kong are very disappointed. They are desperate and are cutting their already low-risk exposure. Hao Hong, chief economist at C-Rui Group, said, The market has been looking for policy boosts, but only piecemeal policies have been introduced. It is like giving a patient life support instead of performing a much-needed surgery. Hao Hong added that if the Chinese Communist Party authorities want to restore confidence in the economy, they must stop all activities that interfere with the market and allow the market to play its role. A man from Hubei falls during morning run and sees the wonder of a phoenix dancing in the sky. In the early morning of September 9, a man in Huangshi City, Hubei province, accidentally fell during his morning run. When he looked up, he unexpectedly witnessed a phenomenon he described as a phoenix dancing in the sky. According to Jimu News, around 6 a.m., Mr. Ming from Yangshan County, Huangshi City, fell while running on a small hill. After the fall, he looked up and noticed a colorful cloud resembling a phoenix soaring in the sky, describing the sight as incredibly fantastic. I was so shocked when I looked up and saw this scene in the sky, Mr. Ming said. He immediately took a photo of the phenomenon with his phone and shared it on social media, where it attracted attention from netizens. Mr. Ming told the media that the sun had just risen and illuminated the cloud. At first glance, it looked like a golden phoenix, he said, noting that the phoenix's head and tail were clearly visible, flying toward the sun. It truly looked like a phoenix dancing in the sky. The whole scene lasted about 10 minutes before dissipating. This wasn't the first time such a sight was observed. In November 2019, during the anti-extradition democracy protest movement in Hong Kong, a giant phoenix cloud appeared in the sky, resembling a phoenix rising from the ashes under the reflection of the setting sun. Photos of the fire phoenix cloud were widely shared by Hong Kong netizens on Facebook, with many praising it as the guardian of Hong Kong, symbolizing the city's resilience and rebirth from the ashes. Honda and Nissan of Japan, close factories and production lines, accelerating withdrawal from China. China's economy is in serious recession. Bad news is pouring in, and the wave of closures and bankruptcies of businesses in China is accelerating. Recently, Japan's Honda said it would close its factories and production lines in Guangzhou and Wuhan and withdraw from China. A month earlier, Japan's Nissan Group also officially announced the closure of its factory and production line in Changzhou, at the same time cutting production capacity in China and planning to withdraw from the nation as soon as possible. Also in the past few days, Nippon Steel Group announced the end of 20 years of cooperation with Baisteel and its withdrawal from China. The wave of leading Japanese, Korean and Western corporations accelerating their withdrawal from China has been pushing a large number of workers and unskilled laborers in the mainland to the risk of long-term unemployment. Unemployment and poverty are returning, and the Chinese economy is on a steep decline. Japanese companies leaving China will take away some industrial chains, and the unemployment wave in China will become even more chaotic. Japanese automaker Honda Motors said on Thursday it will close a factory in China and stop vehicle production at another, amid fierce competition and falling sales in the mainland China market. Honda will close a factory operated through a joint venture, JV, with Chinese state-owned automaker Guangzhou Automobile Group in October, a company spokesman said. The automaker already produces the Accord sedan at the plant, which was established nearly two decades ago and has an annual production capacity of 50,000 vehicles. Honda will suspend production at another factory in China that it operates through a separate joint venture with Dongfeng, the spokesman said, adding that the plant has an annual production capacity of 240,000 vehicles. The spokesman said Honda is facing difficult conditions in the world's largest auto market, China. The company's annual production capacity in China will decrease from 1.49 million vehicles to 1.2 million vehicles due to the shutdown, the spokesperson added. Previously, when Nissan Motor Group closed its latest assembly plant in Changsha, China, it was a seismic incident in a series of failures that Japanese automakers have suffered in an increasingly fierce market. Japanese car sales in the country have dropped 20 percent from their 2020 peak. Nissan and its peers have produced cars in large quantities in China since 2000 At one time, Nissan was considered more successful than Toyota Motor and Honda in the Chinese market. They have poured resources into factories and dealers. Nissan's production output in China surpassed Toyota and Honda for 10 years until 2018. The Changzhou plant was expected to boost sales further. When it opened, China was Nissan's largest market for new car sales, surpassing the United States. But the price war waged by Chinese rivals has had devastating consequences. Nissan's sales in China fell 16 percent to 790,000 vehicles last year, marking the fifth consecutive year of decline. Toyota's sales in January-May 2024 decreased 10 percent year-on-year to 630,000 vehicles. Honda's sales decreased 17 percent to 340,000 vehicles. Honda and Nissan Motor are among the Japanese brands for which China has traditionally been a strong market, but is now being greatly influenced by the rise of low-cost domestic automakers. Preparing for war? The CCP is accelerating its stockpiling of food and metal supplies. The British economist pointed out that China seems to be hoarding materials such as food, metals, and energy at a rapid pace, and at a time when prices are high. This has caused concerns from the outside world. The economist published an article on July 23, pointing out that the Chinese economy has suffered from political mismanagement and a real estate crisis in recent years. Chinese Communist Party officials have also expressed a desire to shift away from resource-intensive industries. Logically, China's demand for commodities should be shrinking rapidly. But on the contrary, data shows that China's imports of many basic resources set a record last year, with imports of all types of commodities increasing by 16 percent by volume. The analysis pointed out that according to the U.S. Department of Agriculture's forecast, China's wheat and corn stocks will account for 51 percent and 67 percent of the world's total by the end of this season, respectively, an increase of 5 to 10 percentage points, from 2018. Soybean stocks have also doubled since 2018 and are expected to reach 42 million tons by the end of this season. In addition, China's crude oil reserves have increased from 1.7 billion barrels to 2 billion barrels since 2020. China's underground gas storage centers grew sixfold between 2010 and 2020, to 15 billion cubic meters. Morgan Chase predicts that if you add a dozen liquefied natural gas tank clusters along China's coast, total gas reserves will reach 85 billion cubic meters by 2030. China's commodity imports are still increasing, up six percent in the first five months of this year. Given China's economic difficulties, this does not reflect an increase in consumption. Instead, China seems to be stockpiling supplies quickly and at a time when Lian Xiaowa, an employee of Chen Chuanchuang Law Firm in California, USA, said, In this case, if it is blocked, China's economy will collapse more quickly, and even the entire CCP will not be able to survive, so it has to make some preparations. In addition to political factors, Beijing's hoarding of bulk commodities has also caused anxiety because food, energy, and other materials are strategic resources. Len Xu, a current affairs commentator living in United States, said, The CCP is constantly increasing its stockpiling. If you compare this kind of behavior with those of its neighboring countries that are allied with the CCP, you can see the clues. What is Russia doing in these countries that the CCP has long-term alliances with? It is fighting. What is North Korea doing? North Korea is also clamoring for war. All of their aggressive behaviors are related to each other. What is the connection? The CCP is preparing for war. Lian Xiaowa added, This sends a very bad signal to the outside world. That is, China may not only want to decouple from the world, but may also want to start a war, including whether to attack Taiwan or provoke a war in the South China Sea. No one is sure, because it is difficult for you to speculate about such a country through common sense. The economist said that the current evidence shows that Xi Jinping's stockpiling is more likely a defensive measure, because the current scale is not enough to ensure safety in a fierce conflict. Lian Xiaowa noted, This world needs to communicate and exchange with each other, including the inseparable economy and the international division of labor. If a country relies on hoarding some things, it will always have a time limit. Once decoupling occurs, once serious hostilities occur, it will not be resolved in a few days, months, or even years. Its hoarding of these things may be a psychological effect at most, and it cannot determine the fundamental outcome. The CCP's hoarding of supplies has aroused the vigilance of the United States. Lian Xiaowa, an employee of Chen Chuanchuan law firm in California, said that the Chinese people should also remain vigilant because the CCP will definitely use these resources for military purposes or for the CCP's powerful groups first.